Introduction(cont The Ricardian model ( chapter 3 says differences in productivity of labor between countries cause productive differences, leading to gains from trade Differences in productivity are usually explained by differences in technology The Heckscher-Ohlin model(chapter 4)says differences in labor, labor skills, physical capital and land between countries cause productive diferences, leading to gains from trade4 Introduction (cont.) • The Ricardian model (chapter 3) says differences in productivity of labor between countries cause productive differences, leading to gains from trade. – Differences in productivity are usually explained by differences in technology. • The Heckscher-Ohlin model (chapter 4) says differences in labor, labor skills, physical capital and land between countries cause productive differences, leading to gains from trade